A-1252, JULY 31, 1924, 4 COMP. GEN. 135

A-1252: Jul 31, 1924

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THE CONTRACTOR IS NOT ENTITLED TO REFUND OF LIQUIDATED DAMAGES WHEN THE APPLICATION FOR EXTENSION IS NOT SUBMITTED WITHIN THE 30-DAY PERIOD. WHICH ARE DEFINED IN THE CONTRACT AS INCLUDING STRIKES BUT EXCLUDING DELAYS IN SECURING MATERIAL. THE CONTRACTOR IS NOT CHARGEABLE WITH LIQUIDATED DAMAGES FOR DELAYS CAUSED BY RAILROAD OR STEVEDORE STRIKES DELAYING TRANSPORTATION OF MATERIALS. FOR WHICH EXTENSIONS OF TIME WERE GRANTED. THE CLAIM FOR $935 WAS DISALLOWED ON THE GROUND THAT APPLICATION FOR AN EXTENSION OF TIME FOR THE 11 DAYS' DELAY HAD NOT BEEN MADE WITHIN 30 DAYS AFTER THE HAPPENING OF THE CAUSES OF DELAY AND THE CHARGE WAS CERTIFIED AGAINST THEM ON THE GROUND THAT THE EXTENSION OF TIME GRANTED WAS FOR DELAYS IN SECURING MATERIAL WHICH WERE EXPRESSLY EXCEPTED FROM THE TERMS OF THE CONTRACT AS DELAYS FOR WHICH THE CONTRACTORS SHOULD NOT RECEIVE AN EXTENSION OF TIME WITH REMISSION OF LIQUIDATED DAMAGES.

A-1252, JULY 31, 1924, 4 COMP. GEN. 135

CONTRACTS - LIQUIDATED DAMAGES UNDER A CONTRACT PROVIDING THAT FAILURE OF THE CONTRACTOR TO SUBMIT CLAIM FOR EXTENSION OF TIME WITHIN 30 DAYS FROM THE HAPPENING OF THE ALLEGED CAUSE OF DELAY SHALL BE "DEEMED AND CONSTRUED AS A WAIVER OF ALL CLAIMS AND RIGHT TO AN EXTENSION OF TIME" ON ACCOUNT OF THE ALLEGED DELAY, THE CONTRACTOR IS NOT ENTITLED TO REFUND OF LIQUIDATED DAMAGES WHEN THE APPLICATION FOR EXTENSION IS NOT SUBMITTED WITHIN THE 30-DAY PERIOD. UNDER A CONTRACT PROVIDING THAT LIQUIDATED DAMAGES SHOULD BE REMITTED FOR ALL UNAVOIDABLE DELAYS, WHICH ARE DEFINED IN THE CONTRACT AS INCLUDING STRIKES BUT EXCLUDING DELAYS IN SECURING MATERIAL, THE CONTRACTOR IS NOT CHARGEABLE WITH LIQUIDATED DAMAGES FOR DELAYS CAUSED BY RAILROAD OR STEVEDORE STRIKES DELAYING TRANSPORTATION OF MATERIALS, FOR WHICH EXTENSIONS OF TIME WERE GRANTED.

DECISION BY COMPTROLLER GENERAL MCCARL, JULY 31, 1924:

ERIC LANGE AND A. H. BERGSTROM, COPARTNERS DOING BUSINESS UNDER THE FIRM NAME OF LANGE AND BERGSTROM, REQUESTED MARCH 12, 1924, REVIEW OF SETTLEMENT NO. 189356-N DATED FEBRUARY 11, 1924, DISALLOWING THEIR CLAIM UNDER CONTRACT DATED JANUARY 29, 1919, FOR $935 DEDUCTED BY NAVY DISBURSING OFFICERS AS LIQUIDATED DAMAGES FOR 11 DAYS' DELAY AND CERTIFYING A CHARGE AGAINST THEM FOR $3,280 AS LIQUIDATED DAMAGES NOT DEDUCTED FOR OTHER DELAYS IN THE CONSTRUCTION OF CERTAIN QUARTERS AT THE NAVAL AIR STATION, SAN DIEGO, CALIF. THE CLAIM FOR $935 WAS DISALLOWED ON THE GROUND THAT APPLICATION FOR AN EXTENSION OF TIME FOR THE 11 DAYS' DELAY HAD NOT BEEN MADE WITHIN 30 DAYS AFTER THE HAPPENING OF THE CAUSES OF DELAY AND THE CHARGE WAS CERTIFIED AGAINST THEM ON THE GROUND THAT THE EXTENSION OF TIME GRANTED WAS FOR DELAYS IN SECURING MATERIAL WHICH WERE EXPRESSLY EXCEPTED FROM THE TERMS OF THE CONTRACT AS DELAYS FOR WHICH THE CONTRACTORS SHOULD NOT RECEIVE AN EXTENSION OF TIME WITH REMISSION OF LIQUIDATED DAMAGES.

A COPY OF THE CONTRACT DATED JANUARY 29, 1919, WAS DELIVERED TO THE CONTRACTOR ON MARCH 6, 1919, AND REQUIRED PERFORMANCE WITHIN 180 DAYS THEREAFTER, OR BY SEPTEMBER 2, 1919. ON ACCOUNT OF EXTRA WORK THE TIME OF COMPLETION WAS SUBSEQUENTLY EXTENDED TO SEPTEMBER 27, 1919. LIQUIDATED DAMAGES FOR EACH AND EVERY DAY OF DELAY BEYOND THE CONTRACT PERIOD WERE FIXED AT $215 A CALENDAR DAY, DIVIDED AMONG THE VARIOUS BUILDINGS AS FOLLOWS: BARRACKS FOR 400 MEN, $50; STUDENT OFFICERS' QUARTERS, $40; DISPENSARY AND CUBICLE WARD, $25; MARRIED OFFICERS' QUARTERS, $15 EACH; STOREHOUSE, $25; AND GARAGE, $15, WITH THE STIPULATION THAT THE CONTRACTOR SHOULD HAVE AN EXTENSION OF TIME WITH REMISSION OF LIQUIDATED DAMAGES FOR ALL DELAYS RESULTING FROM UNAVOIDABLE CAUSES WHICH WERE DEFINED TO BE:

* * * SUCH AS RESULT FROM CAUSES BEYOND THE CONTROL OF THE CONTRACTOR, SUCH AS ACTS OF PROVIDENCE, FORTUITOUS EVENTS, INEVITABLE ACCIDENTS, ABNORMAL CONDITIONS OF WEATHER OR TIDES, OR STRIKES OF SUCH SCOPE AND CHARACTER AS TO INTERFERE MATERIALLY WITH THE PROGRESS OF THE WORK. DELAYS CAUSED BY ACTS OF THE GOVERNMENT WILL BE REGARDED AS UNAVOIDABLE DELAYS. DELAYS IN SECURING DELIVERY OF MATERIALS, OR BY REJECTION OF MATERIALS ON INSPECTION, OR BY CHANGES IN MARKET CONDITIONS, OR BY NECESSARY TIME TAKEN IN SUBMITTING, CHECKING, AND CORRECTING DRAWINGS OR INSPECTING MATERIAL, OR BY SIMILAR CAUSES WILL NOT BE REGARDED AS UNAVOIDABLE. * * *

THE CONTRACT FURTHER PROVIDED THAT---

SHOULD THE CONTRACTOR AT ANY TIME CONSIDER THAT HE IS ENTITLED TO AN EXTENSION OF TIME FOR ANY CAUSE, HE MUST SUBMIT IN WRITING TO THE OFFICER IN CHARGE AN APPLICATION FOR SUCH EXTENSION, STATING THEREIN THE CAUSE OR CAUSES OF THE ALLEGED DELAY. THE OFFICER IN CHARGE WILL REFER THE SAME AT ONCE WITH FULL REPORT AND RECOMMENDATION TO THE NAVY DEPARTMENT, BUREAU OF YARDS AND DOCKS, FOR CONSIDERATION AND FOR SUCH ACTION AS THE CIRCUMSTANCES MAY WARRANT. THE FAILURE OR NEGLECT OF THE CONTRACTOR TO SUBMIT, AS ABOVE PROVIDED, HIS CLAIM FOR EXTENSION OF TIME WITHIN 30 DAYS AFTER THE HAPPENING OF THE CAUSE OR CAUSES UPON WHICH HIS CLAIM IS PREDICATED SHALL BE DEEMED AND CONSTRUED AS A WAIVER OF ALL CLAIMS AND RIGHT TO AN EXTENSION OF TIME FOR THE COMPLETION OF THE WORK ON ACCOUNT OF THE ALLEGED DELAY, AND THE CONTRACTOR AGREES TO ACCEPT THE FINDING AND ACTION OF THE NAVY DEPARTMENT, BUREAU OF YARDS AND DOCKS, IN THE PREMISES AS CONCLUSIVE AND BINDING.

THE 11 DAYS' DELAY FOR WHICH LIQUIDATED DAMAGES OF $935 WERE DEDUCTED OCCURRED IN AUGUST, 1919. THE CLAIM FOR EXTENSION WAS MADE ON JANUARY 7, 1920. OBVIOUSLY THE CLAIM WAS NOT MADE WITHIN 30 DAYS AFTER THE HAPPENING OF THE ALLEGED CAUSES OF DELAY, AND THE ATTORNEY FOR CLAIMANTS CONTENDS THAT THE FAILURE TO MAKE APPLICATION WITHIN 30 DAYS SHOULD NOT BE "DEEMED AND CONSTRUED AS A WAIVER OF ALL CLAIMS AND RIGHT TO AN EXTENSION OF TIME," FOR THE REASON THAT THE CHIEF OF THE BUREAU OF YARDS AND DOCKS RECEIVED, CONSIDERED, AND GRANTED THE REQUEST FOR THE EXTENSION OF TIME, NOTWITHSTANDING IT WAS NOT SUBMITTED WITHIN THE 30-DAY PERIOD AND THAT HIS FINDING AND ACTION ARE CONCLUSIVE ON ALL PARTIES.

THE AGREEMENT OF THE CONTRACTORS TO ACCEPT THE FINDINGS AND ACTIONS OF THE BUREAU OF YARDS AND DOCKS IN THE PREMISES AS CONCLUSIVE AND BINDING, DOES NOT CARRY BY NECESSARY IMPLICATION THAT SUCH FINDINGS AND ACTIONS ARE BINDING ON THE UNITED STATES, ESPECIALLY IN VIEW OF SECTION 236, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24. IT IS UNNECESSARY TO DETERMINE WHETHER THE ALLEGED CAUSES OF DELAY WERE CAUSES EXCEPTED IN THE CONTRACT ENTITLING THE CONTRACTOR TO AN EXTENSION OF TIME WITH REMISSION OF LIQUIDATED DAMAGES FOR THE REASON THAT THE FAILURE TO SUBMIT CLAIM FOR AN EXTENSION OF TIME WITHIN 30 DAYS FROM THE HAPPENING OF THE CAUSE IS REQUIRED BY THE TERMS OF THE CONTRACT TO BE "DEEMED AND CONSTRUED AS A WAIVER OF ALL CLAIMS AND RIGHT OF AN EXTENSION OF TIME" BY REASON OF SUCH CAUSES OF DELAY. IN PLUMLEY V. UNITED STATES, THE CONTRACT QUOTED IN 43 CT.CLS. 266, AT PAGE 269, REQUIRED THE CONTRACTOR TO NOTIFY THE SECRETARY OF THE NAVY OF CAUSES OF DELAY, AND PROVIDED THAT NO CAUSE "SHALL BE" CONSIDERED UNLESS THE CONTRACTOR ,SHALL AT THE TIME OF THE OCCURRENCE OF SUCH DELAY NOTIFY HIM IN WRITING OF THE FACTS AND CIRCUMSTANCES IN EACH CASE," ETC. THE UNITED STATES SUPREME COURT, ON APPEAL, SAID IN 226 U.S. 545, AT PAGE 548, THAT THIS PROVISION OF:

THE CONTRACT REQUIRED THAT SUCH NOTICE SHOULD BE GIVEN TO THE SECRETARY WHEN THE DELAY OCCURRED, EVIDENTLY FOR THE PURPOSE OF INFORMING THE DEPARTMENT AND ENABLING IT, AT THE TIME, TO REMOVE THE CAUSE OF THE DELAY. IT OPERATED TO PREVENT CLAIMS FOR DAMAGES AND FOR FAILURE TO COMPLY WITH THIS REQUIREMENT OF THE CONTRACT (UNITED STATES V. GLEASON, 175 U.S. 588); THE PLAINTIFF IS NOT ENTITLED TO RECOVER.

WHILE THE CLAIM IN THAT CASE WAS FOR DAMAGES CAUSED TO THE CONTRACTOR BY THE DELAY, AND THE CLAIM IN THIS CASE IS FOR REFUND OF LIQUIDATED DAMAGES DEDUCTED FROM PAYMENTS TO THE CONTRACTORS ON ACCOUNT OF DELAYS, THE DECISION IS APROPOS AS TO WAIVER OF RIGHTS BY REASON OF THE FAILURE TO COMPLY WITH THE CONTRACT REQUIREMENT OF NOTIFICATION WITHIN 30 DAYS AFTER THE HAPPENING OF THE EVENT, AND IT MUST BE HELD THAT THE CONTRACTORS ARE NOT ENTITLED TO THE PAYMENT CLAIMED. MOREOVER, THE CERTIFICATION OF THE FINAL PAYMENT VOUCHER AS CORRECT AND JUST AND ACCEPTANCE OF PAYMENT EVEN IF THE 30-DAY PERIOD HAD NOT THEN EXPIRED CLOSED THE TRANSACTION SO FAR AS THE CONTRACTOR IS CONCERNED. SEE DECISIONS OF THE COURT OF CLAIMS DATED JANUARY 7, 1924, IN SOUTHERN PACIFIC CO. CASE, JANUARY 14, 1924, IN NORTHERN PACIFIC CO. CASE, AND FEBRUARY 11, 1924, IN SEABOARD AIR LINE CASE.

THERE REMAINS FOR DECISION THE QUESTION AS TO WHETHER THE CHARGE IS PROPER OF $3,280 AGAINST THE CONTRACTORS AS LIQUIDATED DAMAGES NOT DEDUCTED FROM PAYMENTS BY NAVY DISBURSING OFFICERS. THE DELAYS OCCURRED IN SECURING MATERIALS FOR THE CONSTRUCTION OF THE BUILDINGS, AND THE DELAYS AS FOUND BY THE CHIEF OF THE BUREAU OF YARDS AND DOCKS RESULTED FROM RAILROAD AND STEVEDORE STRIKES. THE DELAY WAS NOT THE RESULT OF SUBCONTRACTORS FROM WHOM THE CONTRACTORS PURCHASED THE MATERIALS, NOR DID IT RESULT FROM DELAY OF THE CONTRACTORS IN PURCHASING THE MATERIAL. OTHER WORDS, THE DELAY WAS NOT CAUSED BY EITHER THE CONTRACTORS OR SUBCONTRACTORS, BUT BY RAILROAD AND STEVEDORE STRIKES IN THE TRANSIT OF THE MATERIAL. UNDER THE TERMS OF THE CONTRACT THE CONTRACTORS ARE NOT CHARGEABLE WITH SUCH DELAYS.

UPON REVIEW SO MUCH OF THE SETTLEMENT AS DISALLOWED CLAIM FOR $935 IS AFFIRMED AND SO MUCH AS CHARGED THE CONTRACTOR WITH $3,280 IS REVERSED.